Monthly Archives: June 2012

Richard Florida argues “class decides everything”

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In an excerpt from his new book, Richard Florida argues “class decides everything”:

But numerous indicators and metrics suggest that class does structure a great deal of American life. America lags behind many nations – from Denmark to the United Kingdom and Canada – in the ability of its people to achieve significant upward mobility. America’s jobs crisis bears the unmistakable stamp of class. This past spring, for example, the rate of unemployment for people who did not graduate from high school was 13 percent, substantially more than the overall rate of 8.2 percent and more than three times the 3.9 percent rate for college grads. At a time when the unemployment rate for production workers who contribute their physical labor was more than 10 percent, unemployment for professionals, techies and managers who work with their minds had barely broken 4 percent…

As fallible as Marx might have been about some things, his focus on class (not to mention his analysis of the tendency of capitalism to sporadically lurch into crisis) was eerily prescient. Marx was the first to see that class was deeper than income or education, or where different groups of people lived or what they could buy. It stemmed from their relationship to the economy, or as he referred to it, “the social relations of production.” Capitalism had only recently overturned the old feudal order of the agricultural age and replaced it with a distinctive class structure of its own, defined by two principle classes. Marx identified the bourgeoisie or capitalist class as those who owned and controlled the means of production; the proletariat or working class was comprised of those who performed physical labor. The rub, of course, was that members of the working class were only paid for a portion of the economic value they created. The owners’ profits were derived from the workers’ “surplus value” — the value they created but were not compensated for…

Three classes now predominate. In addition to the Working Class, which makes up just one in five workers (down from more than half in the 1950s) are the 40 million plus members of the Creative Class, who use their creativity in their work, roughly a third of the workforce; and the 60 million plus members of the Service Class who prepare and serve food, perform janitorial functions, take care of children and old people, and perform routine clerical and administrative functions. The Service Class accounts for some 47 percent of the work force.

These new class divisions undergird virtually every feature of American life.

I detect some ambivalence here: does class really decide everything or is that the interpretation of the headline writer? Perhaps more importantly, how do the effects of class stack up in (substantive) significance compared to other factors like race, gender, educational attainment, and where people live? This goes back to some older debates in sociology involving scholars like William Julius Wilson: is it really race or class that drives outcomes?

This excerpt also does not make clear all the classes into which Florida would place Americans. Three are mentioned here (service, creative, and working) but they would make up roughly 150 million people (hard to figure exactly from this cited paragraph), leaving out over 150 million Americans. Of course, Florida has some interest in the doings of the creative class so I wonder if his analysis is equally adroit in assessing the other categories.

All that said, I assume sociologists would like that another voice with some clout is reminding people that class matters whether some Americans want to believe it or not. It will be interesting to see, however, how many people buy Florida’s larger analysis and claims or whether they would prefer to stick to the creative class ideas which have proved popular.

Further discussion of MoMa’s “Foreclosure” exhibit

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A few months ago, we wrote a couple of times about the “Foreclosed” exhibit at MoMa (see here and here). Here is an extended “roundtable debate” about the exhibit and a paragraph of argument from the four participants:

It is equally interesting, and maybe troubling, that the overwhelming majority of the projects did not take up practices of participatory design that also date back to the 1970s and even earlier. Still, it is worth noting that the more recent codification of “bottom-up” approaches to housing, particularly in Latin America, has coincided with neoliberal “structural adjustment” in the global economy. In the case of sites-and-services and other models of user-generated, low-income housing — in which municipalities provide only minimal financing and basic infrastructure (e.g., water, electricity, sanitation) and depend upon residents to construct their own shelter — this has often meant, among other things, offloading the material cost of that housing onto the backs of already dispossessed residents. This reality in no way delegitimizes vital efforts to empower residents in the provision of housing; it merely marks one of the potential contradictions — the fact that residents are often compelled by implicit, seemingly horizontal power relations to participate in processes that validate and perpetuate their own dispossession. And it suggests that empowerment from below must center on developing the political resources with which to contest — intellectually and pragmatically — the very structures by which this occurs…

That said, public-sector officials can help to encourage both for-profit and non-profit private developers to actually make diverse and inclusive housing — housing for all. Let’s say that we — we the people, via our elected representatives — insist that housing be provided for 100 percent of the population (and actually none of the Foreclosed teams addresses this most basic goal). As a robust player in the housing market, public housing would not only ensure that everyone has adequate housing; it might also spur other housing sectors to better performance. In other words, if the private sector cannot meet the large social goal, then public agencies will develop housing and in this way make the market more competitive. (In the ongoing medical insurance debate, it’s become clear that that the one thing both private and non-profit players will do almost anything to avoid is government competition, which in the case of health care might extend the proven success of such popular programs as Medicare.) It is important to acknowledge that housing is a tool of political power. Just as high jobless rates work to drive down wages (thus hurting workers and helping employers), so too high rates of homelessness, as well as overcrowding and substandard housing, serve to inflate the profits of real estate developers and mortgage bankers. At this most fundamental level, the threat of homelessness gives the 1% greater leverage over the 99%. If we guarantee that as a nation we will uphold the right to housing codified in Article 25 of the Universal Declaration of Human Rights, then we will empower the poor — a class which these days is expanding to include many who once felt secure in the middle…

These are just a few examples of thinking big/starting small. Central to all is the belief that design matters. For decades now, we have waged a battle between Architecture (high design) and architecture (social design). But as with public and private, this is a false debate. Ultimately good design must be aesthetically engaging, economically viable, environmentally responsive and socially just. There is no either/or. If we are to meet the goal of housing for all, good design must be part of the process. This is why Foreclosed is compelling; regardless of the criticism they’ve inspired, all of the projects grappled with the power of good design to reshape housing. And yet they all neglected one final quality of good design: the ability to be actionable. Let’s pair them with more agile, smaller-scale innovative processes, as a first step in realizing their big-scale visions…

Finally, we need an open, democratic approach to long-range planning. I don’t believe it when planners and designers talk about “smart growth,” “retrofitting the suburbs,” and “transit-oriented development.” These seem to me the new mantras for professions that lack the courage to confront the real problems and challenge the dictatorship of developers. The urban planning profession fully endorsed and helped create suburban sprawl when it chose to collaborate with the homebuilding industry and accommodate itself to the highway system. It is now obediently following the market trend towards denser development without critically engaging with and supporting the widespread movements that place quality of life over growth.

These are some big issues to tackle: the impact of neoliberal capitalism on housing, providing housing for all, marrying design and social design, and long-range planning that doesn’t just cater to developers. One exhibit can’t solve all of these concerns but they are important ones that more people should be discussing.

I had an interesting conversation with an architect a while ago that touched on some of these issues. He was interested in partnering with social scientists who could help him better understand how structures fit within a community. I wonder if this isn’t the route more architects will go: looking for a broader understanding of planning, design, and social life. This would require some openness from both sides but there is a long history of overlap between the two parties.

What happens when there are 65 million vacant homes in China

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A review of a new book about China leads with this information about the recent “building binge” in China:

This spring in Beijing, I asked a businessman an obvious question about the risks to China of an economic crash-landing, to which I got a less obvious reply. It is impossible to travel around China without concluding that the place is in the grip of a building frenzy. In less than a decade, China has pumped around $4 trillion into property; tens of millions of houses and apartments as well as Ozymandian public buildings and factory estates – and what hits the eye is how much of it all stands empty. Across the country, uninhabited concrete blocks scab the land, not only in the megacities of the eastern seaboard but also in the sleepier southwest; from filthy mining towns in Henan, all the way to entire ghost towns in Inner Mongolia. With an estimated 65 million homes standing vacant, residential construction last year was still running at a rate of five times demand.

Dwarfing even the $2 trillion borrowed for the Railway Ministry’s high-speed networks since 2008, and the thousands of kilometres of 4–6 lane toll roads with barely a vehicle on them, China’s building binge is the most striking example of what Prime Minister Wen Jiabao famously, but impotently, denounced in 2007 as the country’s “unbalanced, unstable, uncoordinated and unsustainable” model of economic development. Now, with house prices and sales sagging in response to government restrictions aimed at deflating history’s biggest ever property bubble, and with local governments as deep in bad debt as the developers, I asked the businessman what was to prevent the bubble actually bursting, in a spectacular financial explosion?

His answer was that it wouldn’t happen. A lot of these empty apartments, he said, had been bought by Chinese families as investments, and they would patiently hang on to these speculative purchases because interest on savings was derisory. Secondly, although some developers would go to the wall, the bubble would simply not be allowed to burst for fear of public anger as well as economic chaos. China had massive reserves if need arose, he said, and would not hesitate to bundle nonperforming loans off into a state “bad bank”. Its plans to build 36 million “affordable” homes by 2015 would also help to offset faltering private sector demand. When in a hole, in other words, the Party keeps digging.

This isn’t the first piece I’ve read suggesting that we could be headed toward a pop of the property bubble in China…

Study suggests political corruption needs to be investigated in the Chicago suburbs

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A new study from a political scientist argues that political corruption is a big problem in a number of Chicago suburbs:

The study by the University of Illinois at Chicago documented criminal convictions or conflicts of interest affecting more than 60 suburbs in Cook and surrounding counties and more than 100 public officials and police officers.

Former Chicago Alderman Dick Simpson, now head of UIC’s Political Science Department, led the study, and on Monday said corruption in the suburbs, in some cases, is worse than in the city.

“This isn’t a minor problem,” Simpson said. “This is a major problem.”

The IG could either be created by lawmakers and the governor, by each county, or by a consortium of suburbs. It would cost about $1 million annually, far less than the $500 million estimated cost of the problem, according to the study.

So the “Chicago way” extends past the city borders and even Cook County. I wonder if it is even easier to be corrupt in smaller communities where there is less of a media spotlight and relatively few residents are heavily involved or are knowledgeable about local government.

Even if the corruption is widespread, would officials and the public be willing to support an independent inspector general looking into these matters as it creates another layer of government?

It would be interesting to know how these numbers compare to corruption in other metropolitan regions: is Chicago that unusual in this regard?

Century 21 survey suggests many Americans would cut back in other areas to buy their “dream home

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A new survey from Century 21 looks at what other purchases Americans would be willing to sacrifice in order to afford their “dream home”:

69 percent of homeowners who don’t own what they described as their “dream home” would be willing to make sacrifices to their personal lifestyle to be financially able to purchase it. Non-homeowners are more willing to make sacrifices, and 80 percent indicated they are willing to make changes to their personal lifestyle in order to be financially able purchase their dream home, including:

  • 50 percent: would cut back on dining out,
  • 49 percent: would cut back on their shopping for non-essential items (e.g.,
    clothing, accessories, gadgets, etc.),
  • 47 percent: would give up luxuries (e.g., expensive cable packages, trips to the
    salon, etc.),
  • 39 percent: would cut back on vacations, and
  • 10 percent would contribute less to their 401(k) in order to be able to purchase
    their dream home.

This suggests buying a home is still an important priority for many Americans. At the same time, the questions don’t really get at how much people might be willing to cut back (5% on dining out? 50%), how this compares to other purchases (would people say similar things if they were asked about purchasing a new car or some other big purchase), and how much people would need to cut back if they bought a house (there could be a big difference here if people bought a $220k home versus a $450k home). Also, I’m curious about that 50% that wouldn’t cut back on dining out or the 61% who wouldn’t cut back on vacations; do they not need to or would they seriously not do so in order to buy a dream house?

Another note: this was a web survey.

Harris Interactive® fielded the study on behalf of Mullen Communications from April 24-26, 2012, via its QuickQuerySM online omnibus service, interviewing 2,213 U.S. adults aged 18 years and older, of which 1,416 are homeowners and 734 are renters. This data was weighted to reflect the composition of the general adult population. No estimates of theoretical sampling error can be calculated; a full methodology is available.

Two issues here: this was not a random sample (hence the need for weighting) and if there can’t be any estimates of the sampling error, how trustworthy are the results?

Should we care that Apple pays its retail store employees relatively little money?

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The New York Times has a long piece about what Apple pays its retail store workers. Here are some of the details:

About 30,000 of the 43,000 Apple employees in this country work in Apple Stores, as members of the service economy, and many of them earn about $25,000 a year. They work inside the world’s fastest growing industry, for the most valuable company, run by one of the country’s most richly compensated chief executives, Tim Cook. Last year, he received stock grants, which vest over a 10-year period, that at today’s share price would be worth more than $570 million.

And though Apple is unparalleled as a retailer, when it comes to its lowliest workers, the company is a reflection of the technology industry as a whole…

“In the service sector, companies provide a little bit of training and hope their employees leave after a few years,” says Arne L. Kalleberg, a professor of sociology at the University of North Carolina. “Especially now, given the number of college kids willing to work for low wages.”

By the standards of retailing, Apple offers above average pay — well above the minimum wage of $7.25 and better than the Gap, though slightly less than Lululemon, the yoga and athletic apparel chain, where sales staff earn about $12 an hour. The company also offers very good benefits for a retailer, including health care, 401(k) contributions and the chance to buy company stock, as well as Apple products, at a discount…

“It’s interesting to ask why we find it offensive that Wal-Mart pays a single mother $9 an hour, but we don’t find it offensive that Apple pays a young man $12 an hour,” Mr. Osterman said. “For each company, the logic is the same — there is a line of people eager to take the job. In effect, we’re saying that our value judgments depend on the circumstances of the employee, not just supply and demand of the labor market.”

I find two things very interesting from the quoted sections above:

1. This is a reminder that we now live in the era of the service economy. While Apple may generate tremendous profits and have a really high stock price, the majority of its jobs are low wage. This is what our economy looks like today: many jobs are relatively low-trust and low-paying and not everyone will have an opportunity to parlay it into a better, more fulfilling job. One could criticize Apple for such policies but they are hardly the only company doing this and it appears to be effective for generating profits.

2. The difference in perception between Apple and Walmart is indeed intriguing. One company has a better image than the other. Both rely on similar methods as they look for ways to make their products in a more cost effective way (though they aren’t exactly operating in the same price levels in the market – it will be some time before we see Apple computers sold at Walmart), have a number of jobs overseas (or at least their suppliers do), and are looking for ways to maximize their market share. It would be interesting to know if any of the recent reports about Apple employees in China (see this NYT story about Foxconn) has influenced people’s perceptions of Apple as well as altered their consumption habits.

This story got me thinking: what would happen if US Apple retail store workers decided to unionize and demanded better wages (perhaps even a living wage)? Apparently there is an effort underway to unionize the stores:

“People have definitely listed [pay] as a top issue,” said Moll, who started the Apple Retail Workers Union in an attempt to unionize U.S. store workers. “Because of our low wages we often can’t afford to buy the technology that we sell.”

Would Apple strongly fight these efforts and if so, how much negative attention would they receive?

“McMansions making a comeback”!

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Several sources picked up on the latest data from Trulia that suggested more Americans are interested in bigger homes. With a headline of “McMansions Are Making a Comeback,” here is what US News & World Report said:

After greed and excess torpedoed the housing market a few years ago, Americans understandably began favoring more modest homes instead of pricey palatial abodes.

But it seems old habits die hard.

Reverting back to a “bigger is better” mentality, interest in mega-mansions 3,200 square feet and larger has almost doubled from a year ago, according to new data from real estate website Trulia. About 11 percent of today’s house hunters say they want their own McMansions, up from just 6 percent last year…

About 16 percent of those surveyed said their ideal home was in the 2,600 to 3,200 square feet range, but according to listing data from Trulia, homes currently on the market skew much smaller, with only 10 percent of homes listed falling within that range. Nearly 60 percent of homes listed are 2,000 square feet or smaller, which means many house hunters’ hopes will be disappointed.

More from the Wall Street Journal as architects are also noting the trend:

Big homes are back in style.

That’s the headline from the American Institute of Architects’ first-quarter Home Design Trends Survey set to be released Thursday. Eight percent of the 500 architecture firms responding say square footage of homes increased in the first quarter, up from 5% a year ago. This change, the biggest year-over-year jump since the survey started in 2005, ends a multiyear march toward smaller homes driven by the housing implosion…

But today’s buyers are different from those seen during the buy-as-big-as-you-can boom. “People don’t want bigger homes just to have bigger homes,” says Steve Ruffner, present of the Southern California division for KB Home, one of the nation’s largest home builders. “Buyers show up with calculators. They actually calculate cost per square foot. They really understand what they’re getting for the money.”

Interestingly, 45% of architects reported more interest in single-story homes, up from 35% a year ago. The result is the largest percentage since 2005, according to the AIA. During the easy credit housing boom, builders quickly inflated home sizes to generate more profit. An easy way to do that was to tack on a second – or third – floor, making single-stories hard to come by in some communities. While more of today’s buyers seek more space, they don’t necessarily want to deal with stairs. Aging boomers are also more likely to seek a one-story address.

We will see how this plays out. Of course, the story is more complex than “Americans want bigger homes again” or “the housing recovery has begun.” And it will be fascinating to watch how these new, larger homes are marketed and perceived: if buying a McMansion is really a moral choice, can there really be a good defense for such a purchase?

Argument in defense of sprawl: only 3% of US land is urban areas

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In discussing sprawl, a “free-market think tank” posts some figures about land use in the United States:

When speaking to audiences on the subject of the environment, I’m often confronted with people who express concerns about “urban sprawl,” and “over-development.” And polls suggest such concerns are widespread: In a March 2011, Gallup poll, 57% of people worried a great deal/fair amount about “urban sprawl and loss of open space;” and 42% of people said they worried “not much/not at all” about the same issue.

With so many people worried, the pie chart, below, offers some interesting context. Note that only about 3 percent of the US is urbanized. 56 percent is forest and pasture.

Driving outside urban areas makes this quite clear: most land in the United States is not urbanized. But here are some potential flaws with this argument:

1. Just because 3% of the land is urban doesn’t necessarily mean that this 3% is used well.

2. Misusing this 3% could have an overly large effect (compared to its proportion) on the rest of the land.

3. Most people live in these urban areas so while 3% is indeed small compared to all of the land available in the United States, people are much more concerned with the open field near them than they are with the more abstract idea that there is plenty of open land halfway around the country. And since they spend most of their time in denser areas, they think all other areas are like that.

4. Not all of that remaining 97% is “usable land” where it would be easy to build.

The page doesn’t say this but I’m amused that this could essentially be labeled a “pro-sprawl” page. Perhaps they would rather suggest it is a “pro-liberty” argument as there are not too many people who will outright endorse sprawl these days.

Time’s “The History of the American Dream” a limited overview

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Time’s latest cover story titled “The History of the American Dream” (here is the image and the story) seems to be the epitome of a piece that runs when there isn’t big news for the week (and they were just a day or two away from leading with the Jerry Sandusky verdict…). The article itself offers a limited history while repeatedly suggesting the idea of the American Dream is under attack because of economic and political realities. Here are a few quotes from the story:

The Dream is about liberty and prosperity and stability, but it is also about escape and reinvention. Mark Twain understood this. The Adventures of Huckleberry Finn doesn’t flinch from the racism and greed of American life. If there is any redemption to be found, it comes from small moments of communion, of humanity. The novel concludes with the enslaved Jim’s being granted his freedom and Huck’s deciding “to light out for the Territory, ahead of the rest” — an enduring American impulse and an essential element of the American Dream.

The myth of the West was the myth of the nation: that all of us could light out for the Territory and build new, prosperous lives. The allure of the belief in the individual’s capacity to make his way — to cross oceans or mountains — only grew stronger as America grew older. Our center of political gravity has always been in motion from east to west (and, to a real extent, from north to south). Though the Census of 1890 declared that the frontier was no more, the idea of packing up and moving on to better things has never faded.

Yet there is a missing character in this popular version of the story of America’s rugged individualism: the government, which helped make the rise of the individual possible. Americans have never liked acknowledging that what we now call the public sector has always been integral to making the private sector successful. Given the American Revolution’s origins as a rebellion against taxation and distant authority, such skepticism is understandable, even if it’s not well founded. As we have with race, we have long proved ourselves quite capable of living with this contradiction, using Hamiltonian means (centralized decisionmaking) while speaking in Jeffersonian rhetorical terms (that government is best which governs least).

The best part of the article: it mentions the important role of government (though he could have included state and local governments as well). Jon Meacham discusses how the government supported the railroad as it granted charters, right-of-ways, and land to companies that wanted to make money and also happened to open up the interior. The contrast here is interesting and instructive: Americans claim to be individualists but the American Dream has been supported by government policies and monies for a long time.

A few things the article could have done better and both of these are tied to more recent understandings of what the American Dream means:

1. Meacham tries to take the big picture here going back to the founders and discussing the Civil Rights Movement. But he misses a key component of the American Dream as it is understood today: the connection to the American suburbs and homeownership. This movement has transformed the country from a land of frontiers to a suburban nation where since the early 1900s, those with opportunity tend to move out of the city to a place that offers some of the city and country.

2. Meacham also misses the role of consumption. Meacham is talking about big ideals in this story but for some Americans, the Dream means being able to live at a certain level. This is exemplified by an early quote in this story about the findings from a White House Task Force:

“middle-class families are defined by their aspirations more than their income. [We assume] that middle-class families aspire to homeownership, a car, college education for their children, health and retirement security and occasional family vacations.”

This is all about consumption, even if each of these objects could be argued to promote liberty, happiness, and human flourishing. The idea of the American Dream was sold heavily to the American public starting in the early 1900s by corporations who wanted to sell refrigerators, cars, radios, and other products. Indeed, the modern understanding of the American Dream is very much influenced by the rise of the mass-production economy as well as the economic prosperity America experienced.

Traffic, corruption, and a 40 mile traffic jam in Lagos

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A journalist recounts being stuck for 12 hours in a 40 mile traffic jam in Lagos and ties his experience to the level of corruption in Nigeria:

But the biggest problem appears to be the unsavory ties between Nigeria’s political and business elites. Under the military dictatorships of General Ibrahim Babangida and then General Sani Abacha, both from the north, a small group of northerners came to dominate the trucking business. These men have reportedly played a key role in shooting down every effort to improve or privatize the country’s moribund, British-built rail system, ensuring that almost all goods must move by road.

According to Tom Vanderbilt, the author of Traffic: Why We Drive the Way We Do (and What It Says About Us), “Traffic behavior is more or less directly related to levels of government corruption.” Vanderbilt cites a clear correlation between traffic-fatality rates per miles driven and a country’s ranking on Transparency International’s corruption index. (In terms of road safety, the Scandinavian countries fare the best; Nigeria is near the bottom of the list.)

In March, Nigerian authorities made an attempt to unclog the highway, arresting illegally parked truckers and confiscating 120 vehicles. The Nigeria Truck Owners Association retaliated by calling a one-day strike that crippled the ports. The next day, traffic was as calcified as ever. About half a dozen agencies—the Inter-Ministerial Implementation Committee on Port Approach Roads in Lagos, the Lagos State Traffic Management Agency, the Federal Road Safety Commission, the Vehicle Inspection Officers—share responsibility for keeping traffic moving on the highway, but all of them are considered toothless.

Does Vanderbilt’s correlation hold independent of a host of other factors (such as central government spending on highways, etc.)?

I suspect experiences like these would leave Americans much more grateful for their roads and highways which they can tend to complain about. It reminds me of the 2010 story of a “nine day, 100 km” traffic jam outside of Beijing. This sort of stuff simply does not happen in the United States, even in the worst case scenarios such as really bad accidents (like the smoke-caused one earlier this year in Florida) or natural disasters (such as evacuating New Orleans before Hurricane Katrina). Granted, Americans may lose many hours a year in congestion, particularly in big cities, but the traffic does eventually clear and it does have a predictability to it. In other words, well-paved, maintained, and policed roads should not be taken for granted: they aren’t guaranteed in much of the world.